Trump govt faces up to $166 bn tariff refund bill after court says all importers must be paid

A US federal court has ruled that tariff refunds linked to president Donald Trump’s invalidated trade measures must be paid to all eligible importers, rejecting the administration’s attempt to limit compensation to companies that challenged the tariffs in court.

The decision could significantly increase the government’s financial liability, with potential refunds rising from an estimated $11 billion to as much as $166 billion (approx. ₹15.88 trillion).

The ruling marks the latest development in a prolonged legal battle over the tariffs and sets the stage for a fresh appeal by the Trump administration before the US Court of Appeals.

Judge rejects administration’s interpretation

The administration argued that it was only required to compensate the roughly 4,000 importers that had filed lawsuits challenging the tariffs. It also maintained that a Supreme Court-imposed 80-day deadline for issuing refunds did not require payments to all affected importers within that timeframe.

Federal Judge Richard Eaton rejected that position, ruling that refunds must be paid to all eligible importers and that the court’s timeline applies to the entire refund programme.

The decision broadens the scope of the government’s obligations and could substantially increase the total amount to be repaid.

Government preparing appeal

The administration is now preparing to challenge the ruling in the appellate court, extending a dispute that has already generated billions of dollars in refund claims.

According to court proceedings, the government has so far acknowledged claims worth approximately $90 billion. Refund orders totalling $23 billion have already been forwarded to the Treasury Department for payment.

The latest ruling could require officials to process and pay substantially larger sums if it survives further judicial scrutiny.

Court scrutinises refund process

Judge Eaton also examined the refund mechanism being administered by US Customs and Border Protection (CBP).

While the court found the agency’s online claims system to be operational, it urged officials to accelerate the pace of refunds and questioned the government’s broader legal approach to the issue.

The judge had previously directed CBP to create a comprehensive database identifying all affected importers and the amounts owed to them. In response, the agency launched an online refund platform on April 20 and has been processing claims in phases.

Growing tension over implementation

The speed of the refund programme has emerged as a separate point of dispute.

The court has sought direct engagement with CBP leadership to monitor compliance with Supreme Court directives and ensure refunds are processed within mandated timelines.

The developments underscore growing friction between the federal judiciary and the Trump administration over the implementation of the tariff refund programme, even as the broader legal battle continues through the appeals process.